How a Credit Bureau Functions

Information

There are three major credit bureaus--Experian, TransUnion and Equifax--and all three gather information on consumers when they get a loan or credit card, or use credit in some other way. Companies such as Visa and MasterCard issuers, banks that make loans, cell phone carriers and others all report your account and payment history to the three credit bureaus each month.

Consumer Files

Using the information passed along by credit issuers, the credit bureaus put together a file on each consumer. They create the file by compiling all of the information into a format that is simple to read and interpret. All of the accounts are summarized in that one file.

Categories

Credit bureaus provide other information, above and beyond credit accounts and payments. It falls into four categories, the first of which is identifying data such as name, home address, telephone number, Social Security number, date of birth and employment history. The second is credit accounts and repayment history. The third contains public court records including bankruptcies and tax liens. The fourth lists any inquiries made by potential creditors and others who recently requested a copy of the report.

Access

According to the Solve Your Problems website, access to your credit report is only given out by the bureaus under certain circumstances. You can give prospective creditors and potential landlords and employers permission to get your report. It can also be viewed by potential insurers and agencies evaluating your eligibility for certain governmental benefits. You are also entitled to one free copy of your report from each of the three credit bureaus annually. Anyone who obtains an illegal copy of your credit report may face a year in jail.

Limitations

A credit bureau functions under the limitations of the Fair Credit Reporting Act. The act spells out how bureaus can gather and use data and the process under which you can dispute incorrect information. If you find any wrong entries on your credit report, you can dispute it in writing. If the credit bureau cannot confirm its accuracy, it must be removed from your report.